Backgrounder: Delivering on the Gas Tax

For Immediate Release
October 22, 2004

Delivering on the Gas Tax

The McGuinty government is delivering on its commitment to invest two cents a litre of the provincial gas tax in public transit.

Over the next three years, this government will invest more than $680 million in 78 transit systems. This will benefit 105 municipalities across Ontario.

As of October 1, the Ontario government has dedicated one cent a litre of provincial gas tax funding for public transit. This will increase to 1.5 cents in 2005, and the full two cents in 2006.

These investments will expand and improve transit service and increase capacity. This will attract new transit riders by giving them a more reliable and convenient alternative to the car.

By helping to increase transit ridership, especially in the GTA, this initiative will reduce congestion, commute times and smog. This makes Ontario more competitive and improves quality of life for Ontarians.

The formula for gas tax funding is based on a ratio of 70 per cent ridership and 30 per cent population. This strikes a fair balance between the needs of large established transit systems and smaller municipalities.

Through gas tax funding, the McGuinty government is spending twice what the previous government did on public transit.

Economic Benefits Of Transit

• Every $10 million invested in public transit creates more than 300 jobs, and boosts business sales by more than $30 million.
• Research in the GTA suggests that if we don't invest in transit, the average commute time will increase by 50 per cent by 2021.
• Public transit is safer than any other type of transportation. It has the lowest fatality rate of any mode of urban transportation. Without it there would be at least 150 more transportation fatalities each year, increasing health care costs by more than $1 billion annually.
• Congestion in the GTA costs the economy more than $2 billion each year in lost productivity.
• Transit increases personal mobility for millions of Ontarians who do not or cannot drive.
• Living near a subway station increases property values by about $4,000.
• According to the Canadian Automobile Association, one transit bus can take as many as 40 cars off the road, and save 70,000 litres of fuel.
• In 2001, 30 per cent of greenhouse gas emissions in Ontario came from the transportation sector.
• Air-related health costs in Ontario now total $1 billion with approximately 64,000 emergency room visits in Ontario each year due to smog.

See also: How Municipalities Benefit From Provincial Gas Tax Funding